Last weekend was packed with significant horrible events related to the Catalonia Independence Referendum. As schedules, on October 1st, the Spanish Province of Catalonia held a referendum, an event which was not expected to be marked by violent actions.
Madrid police troops sent to ban the voting process
Since many officials blamed the Referendum as being unconstitutional, the central government had deployed troops in order to stop people from voting. However, the events got worse and around 480 people were reportedly being injured. Many analysts suggests that the decision had made the split between the Madrid and Catalonia officials larger and even though the outcome won’t be a split in the recent future, more steps had been made in that direction.
Preliminary results point towards a staggering majority in favor of independence
As officials say, 90% of the people who voted, had chosen the independence path. This is just a preliminary figure as there are still a few thousand votes to be counted. However, since most of the votes had already been counted, that will most likely have a limited impact on the final result.
Dark clouds seem to be heading towards Spain, as the Prime Minister Mariano Rajoy will face a severe political crisis in the near term. Since Catalonia is one of the most important touristic destinations is Spain and since it accounts for 20% of the country’s GDP, the central government will likely do whatever they will could in order to stop the split process going forward.
Even though the PM stated that he remains opened to dialog and further negotiations with Catalonia officials, the outcome looks very uncertain thus far.
The event had a strong negative effect on the European financial markets and currency trading. Investors will remain cautious until the outcome will be certain, but the Referendum could continue to influence the performance of all asset classes in the short-term.
Looking ahead, will be important to watch how the negotiations will take place and if the Independence will materialize, that will most likely have a negative impact on Spain, in the long run.
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